 The States hopes the plans will make the island more competitive |
Employers in Guernsey are to bear a greater burden for a multi-million pound financial shortfall when corporation tax is scrapped. The States has agreed on big changes in social security contributions.
The current upper limit is �36,000 a year for companies. This will be raised to �100,000 a year. Employees will only have to pay a maximum of �60 a year.
Budget deficits of up to �50m have been projected when the corporation tax is scrapped in 2008.
Contingency reserve
Meanwhile, States members have rejected moves to halve the amount of money earmarked from Guernsey's so-called "rainy day fund" to soften the blow from the Policy Council's tax plans.
The council is proposing to spend a total of �100m from the contingency reserve.
Deputy Mark Dorey wanted the total cut to a maximum of �50m to safeguard the fund from unnecessary strain.
The Policy Council is proposing spending the �100m over three years.
Under the corporation tax plans, the tax will be scrapped for many businesses and only 10% charged for some companies in a bid to make the island more competitive as an off-shore banking centre.
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